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Does the form of delivering incentives in conditional cash transfers matter over a decade later?

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  • Andres Ham
  • Hope C. Michelson

Abstract

We study whether Honduran children exposed to a conditional cash transfer program from 2000-2005 experience lasting effects on human capital and labor market outcomes in early adulthood. The government randomly assigned three forms of delivering program benefits across targeted municipalities: demand (vouchers), supply (clinic and school subsidies), and a combination of both. This program provides an opportunity to explore if and how differential exposure to incentives produces longer term effects. Using municipal-level panel data, these effects are estimated using difference-in-differences. We find that the form of delivering cash transfers influences the degree to which these programs make progress towards their objective of reducing future poverty. Compared to municipalities receiving support from the Honduran Poverty Reduction Strategy, our study indicates that exposure to demand-side incentives individually has no lasting impact. However, joint exposure to both demandand supply-side incentives does lead to measurable improvements in schooling and labor market participation. ***** Este trabajo investiga si ninos que recibieron transferencias monetarias condicionadas durante la primaria en Honduras muestran un mejor desempeno educativo y laboral en su juventud. El Gobierno asignó tres formas de entregar las transferencias: incentivos a la demanda (vouchers), incentivos a la oferta (subsidios a centros de salud y escuelas) y ambas juntas. Este programa permite explorar la efectividad de distintos mecanismos para la entrega de subsidios una década después del comienzo del programa. Utilizando datos longitudinales a nivel municipal, estimamos los efectos del programa por el método de diferencias en diferencias. Encontramos que la forma de entregar las transferencias condicionadas afecta la efectividad de estos programas para lograr su objetivo de reducir la pobreza intergeneracional. En comparación con municipios que recibieron programas de la Estrategia para la Reducción de la Pobreza, nuestro trabajo indica que recibir incentivos adicionales a la demanda no tiene impacto duradero. Sin embargo, recibir ambos incentivos juntos –demanda y oferta– genera mejorías significativas en los resultados educativos y laborales mas de una década después del inicio del programa.

Suggested Citation

  • Andres Ham & Hope C. Michelson, 2018. "Does the form of delivering incentives in conditional cash transfers matter over a decade later?," Documentos de trabajo 17642, Escuela de Gobierno - Universidad de los Andes.
    • Handle: RePEc:col:000547:017642
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    2. Patel-Campillo, Anouk & Salas García, V.B., 2022. "Breaking the poverty cycle? Conditional cash transfers and higher education attainment," LSE Research Online Documents on Economics 115021, London School of Economics and Political Science, LSE Library.
    3. Patel-Campillo, Anouk & García, V.B. Salas, 2022. "Breaking the poverty cycle? Conditional cash transfers and higher education attainment," International Journal of Educational Development, Elsevier, vol. 92(C).
    4. Nguyen, Cuong Viet & Tarp, Finn, 2023. "Cash Transfers and Labor Supply: New Evidence on Impacts and Mechanisms," GLO Discussion Paper Series 1243, Global Labor Organization (GLO).
    5. Sarah Baird & David McKenzie & Berk Özler, 2018. "The effects of cash transfers on adult labor market outcomes," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-20, December.
    6. Pfutze, Tobias, 2019. "Should program graduation be better targeted? The other schooling outcomes of Mexico’s Oportunidades," World Development, Elsevier, vol. 123(C), pages 1-1.

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    More about this item

    Keywords

    Conditional cash transfers; long-term effects; demand- and supply-side incentives; human capital; labor markets.Transferencias monetarias condicionadas; efectos de largo plazo; incentivos a la demanda yoferta; capital humano; mercados laborales.;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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